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Monday Aug 20, 2012

Durban's Virginia Airport could be moved

Breaking months of silence - and possibly explaining the uncertainty behind lease renewals for Virginia Airport operators - the eThekwini municipality has indicated that it may be looking at alternate plans for the airport site and operations.

Earlier this year, the city reneged on its agreement to renew operators' 10-year leases, citing procedural formalities. However, they are now still no closer to having their leases officially renewed, even though some had already signed the new leases before the agreement was rescinded.

The city has admitted that the hold-up was due to the scheduling of a meeting with city manager S'bu Sithole, who has requested comprehensive reports and analysis on all conditions relating to the leases.

City spokesman Thabo Mofokeng said these included the types of leases, what businesses held them, how long they had been there, the pricing structure of the leases and "issues of equity".

These reports would also include "other matters raised by feasibility studies which were done before, regarding the future use of the airport".

The most recent study was commissioned in 2007, and carried out by auditing and advisory firm Grant Thornton.

Six options - including the capex (capital expenditure) for each - were explored for the location of Virginia Airport:

  • It remains where it is - R0.

  • It remains where it is but has an extended runway built - R7.5m.

  • It moves to King Shaka International Airport - R65m.

  • It moves to Durban International Airport once King Shaka airport opens (no longer applicable) - R32m.

  • It moves to an entirely new general aviation airport at Cato Ridge - R300m.

  • It closes - R0.

    "On a qualitative basis, option five (moving to Cato Ridge) is not viable," the report said. "The capital outlay for each option needs to be viewed if relevant in context with the potential of an income generated from selling/developing the existing Virginia Airport site... On a quantitative basis, the selection would need to be made between options one to four."

    The report advised that the city clarify its future policy and strategy in terms of Cato Ridge as well as Virginia Airport, before reviewing the options. It also recommended that closing the airport and moving to Cato Ridge not be considered, and keeping the airport at Virginia only if it was accepted that the airport would not grow.

    Moving to King Shaka would "provide significant opportunity for expanding the [Cato Ridge] industry in line with the city's needs", but would require significant municipal backing and investment, and comprise complexities that might not be solvable.

    The report also proposed possible future uses of the site, including:

  • Continuation of existing residential pattern.

  • Two residential eco-estate developments.

  • Resort development.

  • Public open space.

    Virginia Airport operators, however, believe the feasibility studies and the analysis of the leases are "irrelevant" as their signed leases stand.

    Airport manager Glen Bryce said while there was "no space" at Cato Ridge for an airport, a move to King Shaka had been on the cards for 2035.

    However, moving to the La Mercy airport could negate much of the business of Virginia, and pilot training would suffer.

    The Mercury

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